A machine costing ₹ 36000 has an effective life of 5 years with scrap value of ₹ 5000 following a linear method of depreciation. Which of the following statements are correct?

(A) The value of the machine after 1 year is ₹ 31000

(B) The value of the machine after 2 years is ₹ 23600

(C) The value of the machine after 3 years is ₹ 18400

(D) The value of the machine after 4 years is ₹ 11200

Choose the correct answer from the options given below:

Linear depreciation means the machine loses the same amount of value every year until it reaches its scrap value.

Initial Cost = ₹36,000

Scrap Value = ₹5,000

Life of Machine = 5 years

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Total Depreciation = Initial Cost - Scrap Value

Total Depreciation = ₹36,000 - ₹5,000

Total Depreciation = ₹31,000

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Annual Depreciation = Total Depreciation ÷ Number of Years

Annual Depreciation = ₹31,000 ÷ 5

Annual Depreciation = ₹6,200 per year

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Value after n years = Initial Cost - (Annual Depreciation × n)

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For statement (A), after 1 year:

Value = ₹36,000 - (₹6,200 × 1)

Value = ₹36,000 - ₹6,200

Value = ₹29,800

Statement says ₹31,000. Statement (A) is incorrect.

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For statement (B), after 2 years:

Value = ₹36,000 - (₹6,200 × 2)

Value = ₹36,000 - ₹12,400

Value = ₹23,600

Statement says ₹23,600. Statement (B) is correct.

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For statement (C), after 3 years:

Value = ₹36,000 - (₹6,200 × 3)

Value = ₹36,000 - ₹18,600

Value = ₹17,400

Statement says ₹18,400. Statement (C) is incorrect.

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For statement (D), after 4 years:

Value = ₹36,000 - (₹6,200 × 4)

Value = ₹36,000 - ₹24,800

Value = ₹11,200

Statement says ₹11,200. Statement (D) is correct.

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Therefore, only statements (B) and (D) are correct.